Groups Call Upon FCC to Scrutinize Zero-Rating Schemes and Protect Customers and the Open Internet
Press Release
March 28, 2016
Today, New America’s Open Technology Institute (OTI) joined over fifty other organizations in calling on the Federal Communications Commission (FCC) to address the proliferation of zero-rating schemes by various Internet service providers (ISPs). The letter describes the harms posed by these business arrangements to the open Internet, consumer choice, and online competition.
Zero-rating refers to the Internet service provider practice of exempting certain types of Internet traffic from a subscriber’s data caps. Data caps refer to limits on the amount of data that a consumer can use each month without being assessed an additional fee from their ISP. Currently, companies with zero-rating offerings include Comcast, AT&T, Verizon, and T-Mobile.
If ISPs are allowed to both set data caps and control what types of traffic are exempt from those caps, they are able to unfairly concentrate their power over consumers and competitors, allowing them to pick Internet “winners and losers” and create new impositions on websites and applications. Zero-rating harms also fall disproportionately on low-income communities and communities of color, who tend to rely on mobile networks as their primary or exclusive means of Internet access.
The signatories warn that if the FCC does not investigate zero-rating practices, ISPs will continue to seek ways to monetize capped broadband service at the expense of an open Internet and those who rely on it.
The following statement may be attributed to Sarah Morris, Senior Counsel and Director of Open Internet Policy at OTI:
“Innovation and growth on the Internet is dependent upon an ecosystem of abundant capacity. Unfortunately, we have already seen ISPs combining zero-rating and data cap practices to impose artificial limits on the bandwidth that consumers can use, monetize that scarcity, and then praise their zero-rating schemes as a generous benefit to their customers. In reality, these zero-rating arrangements demonstrate that the caps themselves are arbitrary and, in many instances, unnecessary. Zero-rating plans present a variety of harms by distorting competition, hampering innovation, and limiting consumer choice—all harms the Open Internet rules were meant to prevent. The FCC must enforce its rules and give zero-rating plans, and the data caps on which they are based, the scrutiny they deserve.”
The submitted letter can be read here.